Shiba Inu saw three months of steady increases to its new token holder count — only to lose 60% of that number this past month.
- The dog-themed Shiba Inu token continues to bleed followers — as 69,825 holders have dumped the crypto over the past 28 days since March 16, 2022.
- What’s possibly more shocking than the loss of users is that it continued through the most positive news cycle in the history of Shiba Inu.
- Holders are likely looking to exit for higher, safer gains following last month’s interest rate hike by the Federal Reserve, and lost patience after months of little positive price action despite big developments within SHIB’s ecosystem.
Shiba Inu (SHIB) has lost nearly 70,000 token holders over the last 28 days — falling from a peak of 1,199,453 SHIB holders on March 15, 2022 to 1,129,628 as of yesterday, according to CoinMarketCap — the exact loss was 69,825 users. That averages out to 2,493 lost SHIB holders every day.
The most stunning aspect of this token holder erosion is that it has been ongoing during the most positive, substantive news cycle that Shiba Inu has experienced in its nearly two years of existence. Consider that the following positive news events became public knowledge during the same period as this SHIB user loss:
- The country of Turkey was exploring SHIB as a possible alt-currency to fight inflation.
- The announced launch of Shiba Inu’s own metaverse.
- The resulting virtual land sale via its meta portal.
- The pending launch of its own stablecoin named SHI.
- Plans for a major gaming innovation for its virtual world.
- Popular fintech trading app Robinhood announced that it’s listing SHIB on its platform.
Each of these significant announcements occurred over the past four weeks, yet none of them triggered a sustainable price pump nor created a momentum wave of new users joining the Shiba Inu ecosystem.
SHIB holders seem to be giving up
SHIB token debuted in August 2020 as the “Dogecoin killer.” And with high-profile celebrity support from the likes of Tesla CEO Elon Musk, SHIB rode a tsunami of popularity and its price rocketed more than 49,000,000% last year. After many early adopters of the project became millionaires, hundreds of thousands flocked into the project seeking the same.
However, the mathematics don’t work for a repeat runup because SHIB has a maximum supply of 589 trillion tokens suppressing the price, and its current $14 billion market cap would have to multiply 385 times to an impossible $5.4 trillion valuation for the price per token to reach a single penny. The entire cryptocurrency market is currently less than $2 trillion in value, so there’s no way Shiba Inu itself will be worth $5.4 trillion — roughly 2.5 times more valuable than than all other cryptos combined.
Since its all-time high last year, SHIB dropped nearly as fast and as far — holding in a trading range of $0.000022 to $0.000027 per token. At press time, SHIB is still range bound and priced at $0.00002585, according to CoinMarketCap, and down 70% since its price peak of $0.00008845 in October 2021. Its price has barely budged over the past five months.
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The Fed’s first rate hike in three years could have been the catalyst
It’s difficult to ignore the fact that the exodus from SHIB began the night before the Federal Reserve officially announced its first rate increase of 0.25% in three years on Wednesday, March 16. Also on that day, the Fed announced its plans to jolt interest rates higher — as many as six more times this year — to try and slow record levels of inflation.
In general terms, as interest rates rise investors tend to flee from higher-risk investments and flow into safer options offering higher returns from higher interest rates — courtesy of the Fed. That seems to be what’s happened to SHIB as investors flee its speculative fundamentals. We’ll have to watch this closely because investor flight from SHIB could be the biggest story of the year for the project if it continues. That’s because if it can’t retain and attract new investors, the one-time fans of Shiba Inu may be the ones putting this dog down in the not-too-distant future.
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